The Newz Radar
New Delhi: As of January 31, the Reserve Bank of India (RBI) has imposed significant business restrictions on Paytm Payments Bank.
This includes barring the acceptance of fresh deposits and conducting credit transactions after February 29. Moreover, on March 11, the RBI extended the restrictions by prohibiting Paytm Payments Bank from onboarding new customers.
The RBI’s action was prompted by a Comprehensive System Audit report, followed by a compliance validation report from external auditors.
These reports highlighted persistent non-compliances and ongoing supervisory concerns within the bank. The severity of these issues necessitated additional supervisory measures.
Effective February 29, 2024, Paytm Payments Bank is restricted from accepting further deposits, conducting credit transactions, or enabling top-ups in customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards.
However, allowances are made for interest, cashbacks, or refunds that may be credited at any time. The withdrawal or utilisation of balances by customers, across various accounts and instruments, remains permissible without restrictions, up to their available balance.
Post-February 29, 2024, the bank is barred from offering any banking services, excluding withdrawals and balance utilisation. This includes fund transfers encompassing services such as AEPS, IMPS, BBPOU, and UPI facilities.
The RBI has mandated the prompt termination of Nodal Accounts associated with One97 Communications Ltd and Paytm Payments Services Ltd. This directive is to be executed expeditiously, with the deadline set for no later than February 29, 2024.
(With inputs from agencies)
